now for the eternal question....(well someone was going to ask so i thought i would)..... do you continue trading for the day when you have made your point? take the money and run, or stick around cos youre in the groove??
Ideas and commentary are welcomed. I think making one point is possible. I am a discretionary trader looking to automate. My long term stuff works fine and does well in most all markets Now what if we are asking the wrong question. As candletrader suggested... making .50 points a day is good. Can you aim at making 1 point and by the time the dust settles, walk out with .50? Now as for what I have now. Nothing earth shattering but the setup: 1 minute chart A tight moving average, I use one of my own but something like the Jurik, no lag, moving average. And a 'neutral' indicator like detrended price osc. I think you would have to trade in the most liquid time of the day... First hour and last hour. Also you take one point and walk. No trading through the day. This goes back to what Macro stated... fighting the beast within... in this case greed. Also another question. Would you use stops? would that not be too quick to enter as well at the 1 point profit? What trading platform would work best for this? Thanks all
most systems I trade now go for a percentage return on the overall account on a daily basis----------once I hit this amount the remaining positions are managed different {to protect the gains}. the positions are not flattened right at that moment, just the exits are very proactive to the protection of the gains--------this is for all linear based systems that i trade. my non-linear systems {ratio trade system} are just "on" all the time and the open p&l is analyzed against the accounts current balance. going for a percentage return might be the better way to look at trade system measurement versus points per day.
ineresting Macro. This means, with a tight stop... your month could be made in a day with a strong charging market. The question is how do you get proactive on a 1 point gain? Meaning what does one do to protect that. I would suspect only have a larger target in mind.
funny, but my wife and i were just talking about this question. she says she would walk away. i called her a liar actually, it went more like this: Me: say your goal is 1-pt or $100 a day (on the ER2). you make it in the opening minute. do you keep trading or walk away? Wife: could i lose the $100 or is it guaranteed? Me: you could lose it. and more. Wife: i walk away. Me: yeah right. Wife: *slap* Me: i love yooooouuuuuu! i know the camps seem to be quite divided on the goal-setting, but i'm not convinced it's a bad thing. i think it helps build consistency and confidence. i think there is more to it than just "Should i have a goal or not?" but that's just me ... take care and gtty - omni
you might want to look at: http://www.elitetrader.com/vb/showthread.php?s=&threadid=22589 AMT4SWA has moved on to bigger and better things (i.e. he doesn't post here due to outside commitments), but he did discretionary and automated trading. there are others who did / do both, but this thread was pretty interesting. drew a lot of heat and got silly at times, but still good stuff. hth take care and gtty - omni
omni, i know it's not a casino... but the longer you stay, the easier it is for the market to make 'its money back' personally I think it takes an UNnatural amount of intestinal fortitude to trade 'by hand' as macro puts it when profits are small.
trade management is an art not a science when hand trading {e-manual }. automated trading is a whole different animal-----then you can backtest exit management probabilities and then forward test your system to see if it is acting as you desired--------making the one point a day for the size you trade. two days in a row now my "e-manual" trading doubled my daily percentage target because i stayed in positions after the percentage profit target was passed--------i just had to manage the position according to what are the strengths or weaknesses of my system. of course we had two big sell days so during these days I was willing to maintain short positions to attempt additional profits because the probability was there for additional profits----we had a strong trend. this is why i saw it is an art not a science----you have to use your discretionary experience to make a call-----some work and some don't. this week i had a 7.2 percent return on my account size from the hand trading system i use----this is way over my weekly goal-----so i did not stop at my target, discretion lead me to go for additional profits. when your system is really working well that is the time to ride it strong and not play too conservative---this way, at the end of a year you have the ability with the up and down periods to average a very solid return.
As you state, you determine your success by meeting the goals you set, i.e., something way under 7.2 percent on one account size? What are some of the other alternatives for determining performance? The 1 point per day per contract per some relationship value to capitalization has been chatted about. 1 point relative to some capital value. When a person turns to consider trading effectiviness, what is the standard? When a person turns to considering trading efficiency, what is the standard? I like the trader's transition in skill utilization as measured by the % of the time that he is in the market. the past prints, logs, charts and their combo's that I have posted can give some examples of what may be possible in that transition. Being able to be in the market seems to be a good measure of effectiveness and of efficiency as well. On ES 1 point is 1/40 of the margin. the 7.2% a week looks like 3/40ths or about 3 point a week as way over your return on capital. Are you talking in terms of a little over a point a week on the ES in equivalents?? How many points does the ES travel in a day or in a week, speaking vectorially? What would the "noise" level of price movement be construed as? What units could be used to describe the price vector value? What if a person just wanted to extract capital out of the noise bandwith level? There is a lot of low energy money making sitting right there too. the conversation in the prior posts is focused on almost a trivial amount of money compared to what is available. Must be hard for most people to see that it is there, even. That post on 1 point range day was very very bad sign of the limitations for understanding the market, apparently.